8 - What To Expect With Your Appraisal

Certified Mortgage Advisor
NMLS 1701021
Published 
November 24, 2019

Appraisal: What to expect?

So at this point, you've scheduled your home inspection now is time to work on the appraisal. So the appraisal is going to be paid for upfront, just like the home inspection is the difference between the inspection and the appraisal is the inspection is going to show you the condition. The appraisal is going to show you the value of the property.

You cannot wave appraisal

So the appraisal is required, it's not optional. It's required to show you the value. So the lender can make sure that they can loan you that full amount for the property. So it's going to be paid for early, and we want to get this scheduled as soon as possible.

When to pay your appraisal?

So shortly after you sign your documents, you'll go ahead and get the appraisal paid for upfront. We want to make sure that this is debit only. This has to do with what the underwriter's looking for. They want to make sure you're not taking out any credit to pay for that appraisal. So when you do pay for it, make sure you pay for it with a debit card or check.

Credit on your closing disclosure

You're also going to get a credit on your closing disclosure for this amount. Your loan estimate is going to show you your appraisal costs that way you have everything upfront. There's nothing hidden. It's going to show you how much your appraisal costs you'll pay for it. And then on the closing disclosure, you'll get a credit showing that you paid for it upfront.

Completed AFTER post-inspection

So something else to note is your appraisal is going to be completed after the post-inspection agreement. So this is why it's done way, so you'll pay for the appraisal. The inspection will get done. You'll work out your post-degree, and post-inspection agreement, and then the appraisal will get done.

And the reason why is because if anything falls through with the post-inspection maybe the seller doesn't want to repair anything, or there's something that happens there where you want to get out of the contract. You can get a refund for your appraisal up until the point that the appraiser goes out to the property.

There will be refund if needed

So that's why we wait to make sure the appraisal is scheduled after the post-inspection agreement. So we want to get it paid for early so we can get it scheduled, but then we wait for the post-inspection agreement to be finalized and then have the appraisal done.

So don't worry too much about the scheduling of everything. We will handle that for you and make sure that everything's done correctly, but this is why we want to get the appraisal paid for upfront. Even before you have your post-inspection worked out. If you ever want to get out of the contract, you can get your appraisal refunded until the point the appraiser goes out to the property. So there's that refund if needed.

We want our contract value or higher

Really what we're looking for from the appraisal are two big things. Number one is we want the appraisal value to come in the contract or higher. So if the contract price is $200,000, we want the appraisal to say the house is worth $200,000 or higher. It might come in and say it's worth $210,000. That's perfect.

We want "as is" condition

We also want it to come in as-is condition. So we want it to say it comes in. The purchase price or higher and in as condition. So there are alternatives to these two things. If it comes in lower than our contract price, then you and your realtor are going to have to renegotiate the contract and either see if the seller can come down or you can bring extra money to the table.

We can also use "Subject to"

Another option instead of "as is" sometimes the appraisal will come back as what's called "subject to". And this means it's subject to repairs. So that means the appraiser basically went out and said, this property doesn't meet federal guidelines. It needs some repairs done. These are not optional repairs, these are required repairs to meet the value of the property.

BBut most of the time it comes in at value or higher or in the "as is" condition. If it ever comes back lower or in "subject to" repair condition, then what's going to happen is we'll work with you and your realtor we'll work with you. And we'll set up a game plan to get you into that house.

Check out the next step here: What Does A Conditional Approval Mean? - 9

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